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FTC Bans Scammers Who Targeted Spanish-Speaking Consumers

The operators of a fraudulent debt collecting scheme have settled Federal Trade Commission charges against them by agreeing to be banned from the debt collection business and telemarketing. The defendants were named in an FTC complaint last year, which alleged that they collected millions of dollars from Spanish-speaking consumers throughout the country by demanding they pay non-existent debts. The various companies and individuals were said to have been threatening their victims with lawsuits and arrest and immigration status investigations if they did not agree to make payments on the falsified debts. The settlement orders that the fraudulent company and related…

Maine Amends Debt Collection Statute, Bills Pending in Other States

Maine has amended its statute regulating debt collection while bills regarding debt collection are pending in other states.  Here’s a breakdown of Maine’s amendments: Written or Court Entered Settlement and Payment Agreements Settlement agreements must be in a writing or entered in “open court” or “approved by the court and included in a court order.” For settlement agreements that are not made in open court or in a court order, the debt collector must “provide” a copy of the written settlement agreement to the debtor within 10 days of the agreement being made. A debtor is not required to make…

Eighth Circuit Confirms Collection Action Not ‘Adverse Action’ Under FCRA

The U.S. Court of Appeals for the Eighth Circuit recently affirmed the dismissal of a debtor’s federal Fair Debt Collection Practices Act (FDCPA), federal Fair Credit Reporting Act (FCRA), and state law claims where a debt collector for a major bank pulled the debtor’s credit report and served a garnishment summons after the debtor allegedly had sent a cease-and-desist letter to the debt collector. In so ruling, the Court confirmed that: (1) a debt collector may pull a debtor’s credit report for collection purposes, and that the debt collector did not need to notify the debtor before reviewing such information;…

Nevada Federal Court Holds FHFA Must Consent to HOA ‘Super-Priority Lien’ Foreclosures

The U.S. District Court for the District of Nevada recently held that the federal Housing Economic Recovery Act of 2008 (HERA) requires super-priority lien holders to obtain consent from the Federal Housing Finance Agency (FHFA) prior to foreclosing on any liens on properties where the FHFA is acting as conservator. A copy of the opinion is available at:  Link to Opinion. In 2007, two borrowers obtained a $105,700 loan on a property located in Las Vegas that was secured by a Deed of Trust on the property.  The property was also part of a homeowners association (HOA) and subject to…

Florida Circuit Court Holds Breach of Title Policy Exposes Title Insurer to Extra-Contractual Damages Above Policy Limits

The Ninth Judicial Circuit Court of Florida recently granted summary judgment to an insured against a title insurer after the title insurer failed to except a title defect from coverage under a policy. In so ruling, the Court held that breaching a policy of title insurance exposes the title company to extra-contractual liability beyond the policy’s limits. A copy of the opinion is available here: Link to Opinion. In this case, the insured had purchased 253 acres of property in Florida.  The title insurer issued a policy that failed to note a recorded mobile home plat that appeared to cover…

Senate Bill Proposes to Make Robocalls a Federal Crime

A bill before the U.S. Senate would make commercial robocalls a federal crime, exacting up to a $20,000 fine and a prison sentence of up to 10 years. Introduced on June 25 by Sen. Chuck Schumer (D-NY), S. 1681 would criminalize the use of an automatic telephone dialing system or an artificial or prerecorded voice for calls made “for the purpose of soliciting or encouraging the purchase or rental of, or investment or enrollment in, property, goods, or services,” unless the caller obtained the “prior express written consent” of the recipient of the call. The proposed QUIET Act is nearly identical to…

Illinois Appellate Court Affirms Foreclosure Despite Discrepancy in Copy of Note That Suggested Standing Problem

The Appellate Court of Illinois, Third District, recently affirmed a grant of summary judgment of foreclosure in favor of a mortgagee in spite of an inconsistency between the copy of the note attached to the complaint and the note introduced into evidence. A copy of the opinion is available at: Link to Opinion. The foreclosing plaintiff mortgagee originally attached to its complaint a note that had a stamp stating it was a “true and correct copy of the original.” This copy of the note did not have any indorsement.  However, at summary judgment, the plaintiff introduced the original note.  Unlike…

Florida Court Denies Motion to Dismiss FCCPA Claim Against Loan Owner Based on Alleged Conduct of Servicer, Foreclosure Counsel

The Seventh Judicial Circuit Court of Florida recently denied a motion to dismiss a borrower’s counterclaims alleging violations of the Florida Consumer Collections Practices Act (FCCPA) against the owner of a mortgage loan, based on alleged communications by the servicer and foreclosure counsel with a debtor supposedly known to be represented by counsel and attempting to collect an allegedly invalid debt. In so ruling, the Court also held: Merely foreclosing on a mortgage, without more, did not constitute “debt collection” under the FDCPA; False statements regarding a debt made to a court instead of directly to the debtor are not…

First Circuit Holds Mortgagor Cannot Sue Mortgagee to Quiet Title in Title Theory State

The U.S. Court of Appeals for the First Circuit recently affirmed the dismissal of two mortgagors’ quiet title allegations against a mortgagee, holding that the plaintiff mortgagors could not assert a quiet title claim under Rhode Island law against the mortgagee defendants because Rhode Island is a title theory state, and the mortgagors’ equitable interest in title to the property at issue was not adverse to the mortgagee’s legal interest in title. A copy of the opinion is available at: Link to Opinion. The plaintiff mortgagors (one of whom is an attorney) claimed uncertainty as to which entity held an…

California Court Reverses Judgment on Hazard Insurance Loss Appraisal Award

The Court of Appeal of the State of California, First District, recently reversed a judgment confirming an appraisal award in an action for damages to an apartment building arising from a fire, as the appraisal panel incorrectly assigned a loss value to all items submitted to it for consideration by the insured, regardless of whether the item was damaged or ever existed. A copy of the opinion is available at: Link to Opinion. The insured filed a hazard insurance claim for an apartment building as a result of a fire.  The insurer investigated the claim and issued initial payment of…

NY High Court: Only Possession of Note is Required to Have Standing to Foreclose

The New York Court of Appeals recently confirmed that, under New York state law, a loan servicer had standing to foreclose on delinquent borrowers based only upon the servicer’s demonstrated possession of the note evidencing the borrowers’ loan since the time the foreclosure action was filed. The Court also held that, although the loan servicer’s affidavit set out sufficient facts to show exclusive possession and control of the note prior to the date the foreclosure action was filed, the affidavit would have been better and clearer if it had also included facts describing how the servicer came into possession of…

Consumer Financial Services Conference Slated for Nov. 19-20 in Chicago

The Annual Consumer Financial Services Conference organized by The Conference on Consumer Finance Law, and co-sponsored by the Loyola University Chicago School of Law, Maurice Wutscher and other law firms, will be held Nov. 19-20, in Chicago. The conference will include presentations by some 45 of the best and brightest speakers and practitioners in the country, on the following topics: TCPA: The New FCC Order Fair Lending and HMDA CFPB Administrative Appeals Arbitration Developments UDAAP Cybersecurity CFPB Regulation of Non-Bank Auto Finance TRID: Issues and Implementation Flood and Lender-Placed Insurance Mortgage Servicing and Bankruptcy State Regulation of Debt Collection/Debt Buyers Credit…